Energy companies are now required to spend £910m on insulating their customers’ homes to make them more energy efficient.

UK Prime Minister, Gordon Brown, has today (11 September) unveiled a £1 billion package aimed at helping households to cut their fuel bills.

The Home Energy Saving Programme will help people take advantage of assistance that could cut their energy bills £300 a year.

It also makes it compulsory for energy companies to spend £910 million on insulating their customers’ homes to make them more energy efficient. This is in addition to the existing obligation on companies to pledge £2.8bn over the next three years.

Under the new scheme, households’ ‘Cold Weather Payments’ assistance will increase from £8.50 to £25 per week for winter 2008/09.

Another 40,000 households could see their fuel bills reduced an average of £180 a year through the Government’s Warm Front scheme – a programme which will offer up to £2,700 worth of central heating and energy efficiency measures to low income and pensioner households.

The new measures are in addition to the energy saving proposals announced in the last Budget. These included households with one resident over 60 receiving an extra £50 on their Winter Fuel Payment (up from £200 to £250), with an extra £100 for over-80s households (up from £300 to £400).

Around 600,000 households should also benefit from discounted tariffs by the end of 2008 – three quarters of which will benefit from a price freeze this winter.

The £910m commitment from energy companies will be divided in two ways: £560m will be paid to the Carbon Emissions Reduction Target (CERT) programme to fund subsidised improvements such as loft and cavity wall insulation; whilst £350m will go towards a new Community Energy Saving Programme to create 100 schemes for the most deprived areas of the UK.

Environment Secretary, Hilary Benn said: “The Government has a longstanding commitment to help those living in fuel poverty, but recent price rises mean we are committed to do even more to assist people in reducing their bills where possible. And energy companies must do their bit too.”

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By Natasha Piscitelli